Supernus Pharmaceuticals 3Q 2026 Financial and Business Update Conference Call - SUPERNUS PHARMACEUTICALS INC

Financial Performance:

• Q3 2026 total revenue reached $226.8 million (up 18% YoY), driven by growth in Calvry, Zerzube, Onetco, and Anapco.
• Revenue composition: Net product sales of $178.6 million, Zerzube collaboration revenues of $41.7 million, and royalties/licensing of $6.5 million.
• First nine months 2026 revenue totaled $653.5 million (up 37% YoY excluding discontinued products).
• Q3 GAAP net earnings were $20.9 million ($0.35 per share), a significant turnaround from a $45.1 million loss in the prior year period.
• Q3 Non-GAAP adjusted operating earnings were $55.2 million (up from $41.9 million YoY); 9-month Non-GAAP adjusted operating earnings were $115.2 million.
• Combined R&D and SG&A expenses for Q3 were $153.8 million, down from $209 million in the prior year period.
• Cash, cash equivalents, and marketable securities stood at $359 million as of September 30, 2026, up from $309 million at the end of 2025.
• Full-year 2026 guidance raised to total revenue range of $875 million–$900 million (previously $860M–$890M) and Non-GAAP operating earnings range of $160 million–$180 million.

Guidance and Future Outlook:

• Full-year 2027 guidance is not provided today; management expects to release combined 2027 guidance in February 2027 following the merger close.
• The merger with Endivia Pharmaceuticals is scheduled to close on November 2, 2026, following shareholder approval on October 15.
• Management targets $125 million in annualized cost synergies from the Endivia merger, citing confidence in achieving this based on prior successful integration with SAGE ($200M synergies).
• The combined company aims to grow commercial portfolio performance well into the 2030s and has the financial capacity to pursue further business development.
• Near-term priorities focus on integration execution, maintaining momentum on key growth drivers, and advancing the pipeline.

Business Segments and Product Lines:

• Calvry: Net sales grew 12% to $91 million in Q3; prescriptions grew 18% (outpacing the 10% ADHD market growth). Prescribers reached a high of 46,000; adult prescriptions grew 25% and pediatric 16%.
• Zerzube: Generated $42 million in collaboration revenue in Q3 (50% of Biogen-reported U.S. sales). U.S. sales reported by Biogen increased ~53% YoY; prescriptions grew 43% and prescribers grew 42%. 87% of prescriptions are from repeat prescribers; 43,000+ patients treated.
• Anapco: Net sales reached $17.1 million (up 27% QoQ); prescriptions grew 17% QoQ. Over 400 enrollment forms submitted in Q3. Received 7-year orphan drug exclusivity for motor fluctuations in Parkinson's disease; supplemental NDA for second source of supply expected mid-2027.
• Recovery (Gokabri): Net sales reached an all-time high of $43 million in Q3, growing 4% in both net sales and prescriptions.
• Pipeline: SPN820 (MDD) and SPN817 (focal seizures) Phase IIb studies are enrolling; SPN443 Phase I study expected to start late 2026. SPN817 data readout anticipated in 2028.

Market and Competitive Landscape:

• Calvry maintains a unique market position with only ~1% market share but demonstrates strong growth in a 10%+ growing CNS market.
• Zerzube benefits from a DTC campaign launch and high prescriber retention rates, indicating strong disease awareness and treatment uptake.
• The combined portfolio post-merger will include 11 differentiated medicines across psychiatry, neurology, and addiction.
• Management highlighted the resilience of the ADHD and CNS markets despite competitive pressures.

Risks and Challenges:

• Merger integration risks, though management expressed high confidence in capturing synergies.
• Historical supply chain constraints for Anapco and Zerzube have been resolved but require continued monitoring of conversion rates and enrollment forms.
• SPN817 epilepsy trials are noted to have slow recruitment rates typical of the industry, delaying data readouts to 2028.
• Future guidance is contingent on the successful closing of the merger with Endivia.

Management Commentary and Tone:

• Tone is highly confident and positive, emphasizing "strong momentum," "transformative" merger, and "record" financial results.
• Management highlighted the successful resolution of supply bottlenecks and the optimization of the patient enrollment-to-shipment process.
• CEO Jack Attar and CFO Tim Deck focused on the strategic strength of the combined entity and the clarity of near-term integration priorities.
• Management declined to discuss M&A pipelines beyond the current merger, stating the focus is on integration first, though they remain open to future opportunities.

Analyst Questions and Answers:

• Zerzube Growth: Management confirmed strong demand, citing early metrics from the new DTC campaign and significant room for growth as only 40,000 patients have been treated to date.
• Anapco Enrollment: Q3 saw ~400 enrollment forms; management expects this run rate to stabilize or improve post-supply resolution, with process optimizations already underway.
• M&A Strategy: While integration is the immediate priority, the BD team will continue to search for future transaction opportunities.
• Margins: Management confirmed that standalone operating margins are expected to improve over time due to product lifecycle maturation, though combined entity dynamics will differ.
• Calvry Trajectory: Prescriptions up 23% in new-to-brand, with adults outperforming pediatric growth even during the back-to-school season.

Other Key Points:

• The merger approval was finalized by shareholders on October 15.
• Sopernus (Sopernos) and Endivia (Indivior/Endevio) shareholders approved the transaction, creating a combined entity with significant cash flow potential.
• Collaboration revenue from Zerzube represents approximately 50% of the sales figure reported by partner Biogen.
• The company transitioned from a net loss in the prior year period to a net profit in Q3 2026, primarily driven by revenue growth and reduced acquisition-related costs.